Just a couple of months back, till September 2013, most of the global financial houses painted a gloomy picture of the Indian market and argued that the current account deficit, high real rates and US Federal Reserve’s moves were a drag on the domestic growth.

However, as the fund managers prepare to leave for their month-long vacation in December, a sudden jump in the Indian equities of around 9 per cent in October not only caught them by surprise but also resulted into an upward revision in the Sensex targets by these research houses. They are now talking of Sensex levels of 22,000 and above.

Goldman Sachs has attributed the revision mainly to the changing political environment that is increasingly favouring the BJP-led NDA and which, it says, investors’ perceive to be more business friendly. It also sees an improvement in earning outlook and a moderation in external pressures. On the other hand, Nomura also feels that the positive surprises on political front have fuelled bullish sentiment in the market along with the improving trade data and US Federal Reserve’s decision to defer its tapering plans of quantitative easing.

In the period between September and October, the Sensex rose by around 16 per cent and Nomura accepted that it caught everyone by surprise. “The furious upward march of the market since the beginning of September has caught most market participants off guard,” said a research report by Nomura. “The delay in the Fed’s tapering plans, significant positive surprises in trade data and possibility of positive surprises on the political front have reignited the bullish sentiment.” While these two have already come up with their upgrades on Indian markets for the financial year ending March 2014, there are others who are also expected to follow the same.

Morgan Stanley too had in its September report lowered its target on the Sensex by up to 8 per cent from the levels of around 20,000 then. It said that high real rates posed a downside risk to growth. Experts are saying that very soon others too will come up with their upward revisions.

Leading market experts in India are however willing to hold their upgrades when the markets are on a high.

Market experts in India are, however, willing to hold their upgrades when the markets are on a high. “Not much is expected to change between now and May 2014 as the markets had their run. I would rather wait for election to pass before taking a call on the market,” said a top official with a leading domestic private sector bank.